Organisers have said the network, One Path Network, will provide, "authentic Islamic knowledge using a professional contemporary approach."
The network, funded by community donations, aims to spread the real meaning of Islam amongst all members of the community – Muslims and non-Muslims.
Speaking to ABC News, the head of the network, Malaz Majanni, said: "This is a time where there is a lot of pressure on the Muslim community. Unfortunately, you do find that with the mainstream media, sometimes we are misrepresented.
"Here we are able to make sure that a clear message is sent out."
The western Sydney based studio has cost the community an estimated $m (£674,422) and is being run by 20 volunteers.
The volunteers film and edit videos for the network's YouTube channel and experts are called in to provide their take on relevant events.
A message on the station's website reads: "The media is an essential part of everyday life and a very powerful tool influencing values and ideas. The world is constantly changing and we are connected more than ever.
"There are great opportunities in using media to showcase the religion of Islam. As we embark on this large scale project, we understand that it will be a long and complex journey, but a necessary one.
"In order to make this project effective and successful we will be utilising specialised skill sets from within the community and abroad."
Several videos have already been published by the studio featuring the prominent Sydney Imam Sheikh Omar El Banna, reported The Independent.